Question
The Baguio branch of home office in Manila is billed for merchandise it receives at 125% of cost. The branch turns around and sells them
The Baguio branch of home office in Manila is billed for merchandise it receives at 125% of cost. The branch turns
around and sells them at 25% of billed price. On march 15, all branch's merchandise was destroyed by fire. The
branch's records recovered showed the following:
Inventory, January 1 (at billed price). 165,000
Shipments, January 1 to the date of fire (at billed price) 110,000
Purchase (at cost) from outsiders all resold at markup of 20%. 7,500
Sales. 169,000
Sales returns and allowances 3,750
What is the cost of merchandise destroyed by fire?
a. 120,000
b. 120,240
c. 130,000
d. 140,000
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